M. PETER MCPHERSON: Good morning. My name is Peter McPherson. I'm here to have the opportunity to introduce and then ask a couple questions of the congresswoman. And then as you all know, pursuant to format here, this is very much an audience participation program. And we hope you're active in your own questions.

Congresswoman Nita Lowey is in her 11th term in Congress. She was chair of the Democratic Congressional Campaign Committee and for some years now has been chair of the Subcommittee on Foreign Operations in the House Appropriations Committee.

Many of you have known her and her very active leadership on Israeli issues. I particularly have seen her for example in elementary education work around the developed world. She's been a very strong, engaged person. She's a person who in her leadership roles, I've often seen, believes in things and fights for them. And Congresswoman, we appreciate that.

It's great to have you here today. Thank you. (Applause.)

REPRESENTATIVE NITA M. LOWEY (D-NY): Well, good morning. And I appreciate the opportunity to meet with such a distinguished group. And I'm particularly pleased to be sharing the stage with Peter McPherson.

Your wealth of experience, knowledge -- in international development, the inner workings of the government -- always enrich our dialogue. And I am really pleased to have the opportunity to talk with you and everyone here today.

There are many good friends in the audience. Nice to see you all here. I am very pleased to have the opportunity to talk about this issue. And last week, as many of us in the Congress did, I joined millions of Americans in honoring the service of our brave veterans.

Each year, I am struck by the experiences veterans share, especially those of the "Greatest Generation." Going back to the Revolutionary War until the Cold War, American troops relied heavily upon battlefield tactics and weaponry, often in man-to-man combat on the front lines. It's different today. Success on the battlefield, be it Afghanistan or elsewhere, relies as much on diplomacy and development as on the tanks and tactics of the military.

And we're most successful in these areas when we act before a shot is even fired, but engaging in diplomacy and development is just as critical in the aftermath of the conflict. And as we've seen in recent years, peace requires as much, if not more, planning than the war itself.

The extremely insecure operating environments of the last eight years have made it difficult for civilians to work in the very areas where our national security is at stake. Building educational and justice systems or creating economic opportunities are challenging in complex environments and, as we all know, require new strategies.

So the question is, how do we meet the development challenges within the context of a conflict marked by counterinsurgency or civil strife? And as we see in parts of Afghanistan and Iraq, we no longer operate in purely black and white, conflict versus post-conflict environments. There is tremendous gray space that requires the integration of political and security objectives with longer-term development and governance initiatives, and that's no easy task.

Civilians face key challenges in today's complex theaters -- the ability to operate under or within a military umbrella when there is insufficient security and the capacity to deploy quickly and robustly when civilian-led efforts are possible. And all too often -- I hear this wherever I go -- the U.S. military has had to fill the capacity gap.

And I want to make it very clear I have immense respect and appreciation for the military. Their primary mission and training, however, is not related to rule-of-law activities, keeping girls in school or economic development. And most of the people in the military that I have interacted with do not want the job of nation- building, and they will tell me, "Well, there's no one else here to do it, so I have to do it."

So they may build a school, or they build a clinic. I heard this in Afghanistan a couple of years ago. And I think it was three years ago when it was very clear that in many instances the military was building the schools -- may not know much about the teachers and the books and what went on in the school, but they built the school and they built the clinic.

So as we all know, the mantra of building -- quote, "building civilian capacity," has been promoted by Secretary of Defense Bob Gates, reiterated throughout think tanks, and I'm sure many of you have read dozens of papers on this issue and in Congress as a requirement for creating stability.

And for those of you who are carefully following the current debate -- and I, frankly, am waiting for the president, after careful deliberation, to make his decision -- but if you've read the McChrystal plan and you've talked about the McChrystal plan, a key element of his plan is civilian operations. And he's talking about operating in 80 villages out of 364 villages in the southeast.

And he's talking about the kinds of things that many of us are passionately concerned about: Where do you build the borehole; where do build the schools, where do you build the clinics, et cetera, et cetera? So there is a general understanding that there has to be a nexus between the military and civilian activities. So as chair of the State and Foreign Operations Appropriations Subcommittee, we have really worked to rebuild our civilian base.

Now, you and I know it has been depleted, which is a kind word. In fact, I remember meeting with former -- I guess once an ambassador, always an ambassador -- former Ambassador Neumann in my first trip to Afghanistan. And he compared the numbers: what was there then, and what was there now.

In 2007, nearly a quarter of diplomatic posts were unfilled. In 2000 -- this is everywhere, not just Afghanistan -- in 2008, only 34 civilians were operating in U.S.-led PRTs in Afghanistan, as opposed to 1,021 military personnel -- 34 to 1,021. And it's often been said that there are more people in military bands than are in our diplomatic and development workforce. So we have a steep hill to climb.

Yet we really are making significant headway.

I mean, the State Department has 20,000 -- had 20,000 employees in 2000. By 2009, we had almost 31,000 Foreign Service, civil service, Foreign Service nationals employees. Since 2007, we've provided over a billion dollars for USAID's operating expenses. The Foreign Service office to date has grown by 286 permanent positions, from 1,019 to 1,305. The civil service staff has grown by 115, from 997 to 1,114. So we are finally building a strong, diplomatic USAID base and trying to work together to coordinate our efforts.

In Afghanistan, we are trying to address the complex challenges we face. And by the end of 2009, we should have almost 1,000 civilians, up from a base of 320 in January. That's a lot. And I think what's most important, from all the reports that we're getting, is that the new staff is not cloistered in Kabul. They are increasingly deploying to the field, working at the local level, interacting with Afghans on a daily basis. And of 333 new USAID positions, more than half, 191, are positions in the field and include jobs within PRTs as democracy, agriculture and education experts.

So by building up USAID and other civilian agencies, we can ensure that military-led stabilization efforts in insecure environments have development experts guiding their actions and that civilians are poised to take over when security allows. So despite much negative press and some vocal and legitimate concerns about our programs there, which we know have to be addressed with aggressive oversight, our efforts are making a difference.

Critical questions remain. What is the appropriate role of civilians in insecure environments? How do we protect, quote, "humanitarian space"? What changes do we need to make to our diplomatic and development workforce to engage in these activities?

One recent model, as I mentioned, has been the use of PRTs, which integrate civilian and military actors with local partners. Another has been to have military-led humanitarian and stabilization efforts, while a third has been to rely on civilian-led actions through local partners as security allows.

And I hope we can discuss some of the lessons which can provide helpful guidance in addressing the challenges we face in regions posing the greatest threats to our security.

As we increase civilian capacity, we need to reevaluate who is managing development dollars, who should be leading U.S. government efforts to build long-term stability. Now, as many of you know, the Pentagon now implements approximately 20 percent of our development assistance globally. Now, you're very wise, so you probably knew it, but I remember four or five years ago -- maybe Jim Dyer knew it -- (laughs) -- but waking up one day to a report that Abizaid was doing development work all over Africa. And when I checked with the State, we didn't know about it: "That's not my responsibility." I mean, they -- they weren't even coordinating, which was astonishing to me. And it was upwards of a billion dollars that he was spending in development in Africa -- not in a war zone; doing long-term development. And we can get into the reasons why, et cetera. But I, frankly, was astonished that those people at USAID or State didn't even know about it.

So they are now still implementing approximately 20 percent of development assistance globally. In Afghanistan, the military has spent over 1.6 billion (dollars), via the Commander's Emergency Response Fund (sic). Like an accounting of that one of these days, you know. Who are they sending out this money to? (Chuckles.) We all know the stories. We all read the articles. But 1.6 billion (dollars) is a lot of money for walk-around money in Afghanistan.

The administration must carefully evaluate, prior to military engagement, the development activities, if the short-term benefits of a military-led action are worth the cost, or if there are better civilian alternatives. So as we build capacity at State and USAID, we need to start thinking about the process of how to determine which specific programs should be civilian led and how to transition these programs and funds to their proper home.

And there are important questions for USAID's partners, especially the NGO community. Working with InterAction, DOD has issued guidance on working with NGOs in humanitarian operations. More thought should be given to whether and how NGOs want to interact with military personnel. Many NGOs have expressed concerns about a COIN strategy and whole-of-government approach as endangering their work and their staff, and these concerns must be carefully considered.

So we need a dialogue. If you don't like that, what is the alternative? Ultimately, frankly, each organization will have to come to its own conclusions, based on its own determinations on the impact on safety, neutrality and effectiveness.

And I know there is a very active debate on just this issue.

So finally, I want to make a plea for setting realistic goals and measures of effectiveness. We must remember that there is a distinct limit to what development assistance can accomplish in a complex environment. While impressive efforts are under way to empower grassroots communities through programs like the neighborhood stabilization -- neighborhood solidarity program -- and by the way, how many of you are familiar with the NSP? (Too few ?).

I think it's one of the few programs in Afghanistan that I hear positive things about from everyone, even the intelligence community. They're operating; they're operating in thousands of villages. And unfortunately, when many members of Congress go to these areas, be it Afghanistan or Pakistan or Iraq, you're kept in an environment where you don't get out and see the NSP. So I hope it's as good as everyone says it is. But I've met with many people who talk about it, and I think it's a great model, because it's very effective in building support in the individual villages.

I think strengthening women legislators, working with UNIFEM -- and whenever I go to a country, be it Afghanistan or anyone else, I always meet with the women legislators to see what is their role. How much impact do they really have? In fact, for those of you who were watching the BBC early this morning, there was an interview with a woman legislator after Karzai's inauguration. And when asked about the impact of women, she said, it's great being in the parliament; we'll have to see how many of the women are really appointed to executive positions in the administration.

Now, there are functioning ministries like the Ministry of Health. And I think it's important to remember that you really can't fault USAID or the NGO community for the lack of transformative progress in Afghanistan in many areas, when, frankly, there's neither the security nor the political will at the central government level.

Another program, by the way, besides NSP that I have been so impressed with -- I don't know how many of you are familiar with Global Partnership for Afghanistan. In fact, when this woman came to see me from our district -- Kay used to live in Rye -- she talked about the program, and I thought, I must admit, at the time: It sounds great, but it couldn't be working.

It's called the Global Partnership for Afghanistan. They have one expatriate working for them -- one -- 130 local staff. And they've trained 10,000 farmers in agricultural techniques -- really impressive.

But as we know, USAID and other donors can provide the training and resources. But ultimately it's up to the government and people of that country to transform their society. Of course, Karzai is making many pledges. Let's hope with the technical assistance and our military, there will be a transformation.

So finding the right nexus between our civilian force and the military -- empowering, equipping and energizing civilian agencies -- will continue to be a priority and a necessity frankly if we're going to have any success in Afghanistan and beyond.

So we may now know all the answers now. But one thing is clear. If we don't adapt to these new realities, the military will continue to undertake a greater role in stabilization and reconstruction operations than either the development community or the military want or think appropriate.

So I am cautiously optimistic that all the discussions will lead to a real change. And I have a lot of faith in the creative power and the energy of all the people in this room. And so I look forward to continuing to work, with you and my colleagues, in bringing about positive change in this area.

And thank you again for giving me the opportunity to discuss this very important issue. I look forward to an exchange. And frankly don't feel you have to ask a question, because there's so much wisdom in the room.

I look forward to hearing your response and where you think this is all going and whether you think the military is really serious about working with USAID and the NGO community. So let's open it up.

Okay, thank you. (Applause.)

MCPHERSON: Well, there's a number of -- number of issues, questions to follow on here. Thank you so very much for those comments.

Where should the military be involved in development matters? Think about in terms of type of work, level of security geographically. Where would the line be, as to DOD involvement?

LOWEY: Frankly I don't think there is a line.

The ideal is that the military use the equipment that they're trained to use. And if you can secure the environment, that is where USAID -- working with USDA, working with the Department of Justice, et cetera, in a coordinated way -- should be doing their work.

The question is, can they get out there? Is it safe? How do the NGOs feel about working with the military? But I think, to the extent possible, the military doesn't want to or need to build schools, to think about the books, to think about the teachers. I think that is the job of the diplomatic and development community. And I do believe that's the direction in which we're heading.

Did I mention -- I don't -- (chuckles) -- did I mention McChrystal's plan before? I think I did.

MCPHERSON: Yes, you did.

LOWEY: Yeah, that they're planning to operate in 80 out of 354 villages in the southeast. And all you hear about -- and I'm not saying that I'm supporting it. I'm waiting for the president. I think he deserves the courtesy of making his decision. He is the president of the United States. But in McChrystal's plan, he is operating in 80 -- as I mentioned, 80 out of 354 villages, and is talking -- and he's talking about the development piece; even though everything is reported working about -- working to increase the troop size. You don't hear the other in the press.

So I think that's a very important point. And it will depend upon -- and why we are building up the staff of USAID and USDA, et cetera -- how effectively they can work in those areas. But clearly, it's a key part of the plan.

MCPHERSON: In other words, if the situation on the ground is sufficiently secure for the civilians to do the work, then the civilians should do it?

LOWEY: That's clearly my view. I think it's McChrystal's view. I think -- I don't know that everyone in the military agrees. But I'll tell you, when I was there the first time -- I forget what year -- the USAID director quit. And the military told me, "We can't wait for a year for contracts to go through. When we're going into an area, we need to build that school, we need to build this -- (inaudible) -- now." And this is why I said there has to be a rethinking about how they work together, so that USAID has the people on the ground.

And that's why I'm so proud of the fact that working with the secretary of State -- who, by the way, Kay, is my constituent. She lives right -- a few minutes from me --

MCPHERSON: Kay King. We're going to the Washington office, here.

LOWEY: Oh, I know.

MCPHERSON: Oh, you do?

LOWEY: We were talking about it. She came from Rye.

MCPHERSON: I -- she told me this. Absolutely.

LOWEY: My district. That's all, I just want to make sure we got it -- (laughs).

MCPHERSON: Do you still vote up there, Kay?

LOWEY: Well, we won't get into that. (Laughter.) But any -- (laughs) -- we don't want that. In any event, before we digress --

MCPHERSON: What does this mean in terms of the appropriate role for AFRICOM, for example?

LOWEY: That's very interesting, because I've been to Liberia, as many of you have, and Liberia would love to have AFRICOM there, because of the resources. I think Ellen Johnson Sirleaf would love to have AFRICOM there because, you know, she knows it brings resources, security, et cetera.

And I have to tell you, I am such an admirer of Ellen Johnson Sirleaf. And then I was there a couple years ago, and I saw all the unemployed men hanging out. Charles Taylor's wife, who's in the senate, said if we can't help her and do it -- and we are providing lots of resources from the Congress -- but if we don't see movement there more quickly, I'd worry about the future of her democracy in Liberia. And that's one of the reasons as well, I think, she would like to see AFRICOM there.

MCPHERSON: Now --

LOWEY: Both -- now, this is a debate which we don't have to get into today, but obviously there are others who attribute other motives for AFRICOM. But Liberia wants it. And I'm not even sure right now -- maybe you know -- where -- whether that decision has been made.

MCPHERSON: (Off mike.)

LOWEY: Has it?

MCPHERSON: (Off mike.)

LOWEY: I don't think so. I haven't heard it.

MCPHERSON: Thank you. Thank you for your comments about what the (niche ?) of AFRICOM should be. I mean, that's the first issue.

LOWEY: There are many different opinions.

MCPHERSON: Absolutely. The -- you have -- you've stated a general allocation of roles. And Secretary Gates in fact talked to me (in terms ?) -- what's the process for -- within the bureaucracy here in this phase to get this done?

LOWEY: Well, first of all, the president is the president, and he is in the leadership role, and when he makes these decisions and requests money from the appropriators. To the best of our ability, we usually respond. There have been some changes. We may go up in certain areas and -- as David knows, although he requested a great deal for education this year, for 2010.

So the administration will conduct their process, consulting with the secretary of State, I'm sure the NSC, all his many advisers, and then submit a proposal. And then Jack Lew will work on the proposal, and then it gets to us. And the Defense proposal goes to Jack Murtha. And then we have a choice of accepting, modifying, adjusting. The Congress is the ultimate decision maker here.

MCPHERSON: Now, you have proposed a couple of years ago, with Congressman Berman and some others in Defense Appropriations -- leadership of -- Defense Authorization leadership, I think -- a process to try to reach almost a treaty between the DOD and -- versus the State aid councils.

Is such a -- is that a worthy approach?

LOWEY: Absolutely. In fact, there's an informal discussion -- we haven't met in a couple of months -- there's a little thing like health care and Afghanistan that's been on everyone's mind. But we were meeting in a joint committee task force. It was really an informal discussion. People like Vic Snyder, on the Defense Committee with Ike Skelton; Republicans like Charles -- what's his name? -- ah, he's a good friend of mine -- Busanti (Rep. Charles Boustany) -- something like that -- (chuckles) -- but he's a strong advocate for military and civilian -- Bousanti -- Busamanti -- I think that's it -- (laughs) -- any friends of Charles, please don't tell him! (Laughs, laughter.) He is really very thoughtful and very involved in this issue.

So it's been a bipartisan group that has been meeting. And I expect that when things calm down a little bit, the official -- I think we called it a task force in the bill -- will be created. I mean, the president has had a couple of other things on his mind. The Congress, as I mentioned, has had a couple of other things on our mind. But there are many of us who've discussed this informally, because I think it's a key issue.

MCPHERSON: Well, over the last few months, many have felt that AID was being merged and submerged almost into the department. But with the announcement -- but do you see with the announcement of Raj Shah as the next administrator, the nominee to have that job, does this signal any change in the roles that the secretary expects to have with AID?

LOWEY: I think, at a minimum, before Dr. Shah was appointed, I've had at least a dozen forums, discussions, on this issue. Everything -- (inaudible) -- did a paper on reorganization of foreign aid. Some wanted to have a separate department. Some wanted USAID to have separate budget authority. Some wanted them not to have budget authority and appoint -- and report to -- (inaudible) -- I think it's fair for Dr. Shah to be given some time. He's a very talented, very creative person, and knows that the secretary has enormous respect for him. He did great work at Gates and in other arenas, and I think we'll give him a little bit and let them work it out, because there are many ways -- I could say to skin that cat -- (chuckles) -- many ways to have successful interactions. But the important thing to me is to have a leader like Dr. Shah, who has the respect of most of the players at USAID and development, and I would daresay even in the military.

So I think it's an important step in the right direction.

MCPHERSON: Let's open this up for the next 25 minutes to comments and questions from our group. Many hands immediately went up, you saw.

LOWEY: Remember, you can give me advice or ask a question. Or if the questions are too difficult, I may ask you to answer them.

MCPHERSON: Everyone be brief, though, so we can get lots of people involved.

Right over here.

QUESTIONER: Hi, Rob Quartel (sp) -- Rob Quartel (sp) with Intellex (sp), which -- we're a decision software used in intelligence, homeland security, stuff like that. And we have a very successful project in Jordan, managing traffic congestion countrywide.

LOWEY: I must say, I also serve on the Intelligence Committee, but I can't talk about it. (Laughter.)

QUESTIONER: I -- we -- you and I would have to kill each other.

LOWEY: So maybe we can have a private conversation. (Laughs.)

QUESTIONER: I have three observations based on some of the experiences we have in the MENA. One is that there's -- there is insufficient cooperation -- coordination between AID, TDA, OPEC and Ex-Im. And as a private company, we frequently get caught in between all of those things.

The second is, there is an "iron triangle" kind of relationship -- maybe it's a -- not a triangle; it's a bilateral -- between AID and the NGOs where they spend all of their time defending their turf. They'd rather spend 70 million (dollars) than 2 million (dollars) on something that works -- 70 million in studies. And I think that has to be broken somehow.

And the third is that I think a lot of the aid community is anti- business. So we operate under a TDA grant. We got started -- which has turned into a $30-million project for me, business that employs 220 Bedouin Arabs in Aqaba who would not otherwise have jobs. Now, that's something significant, and it has reduced the cost of transportation 20 percent, blah blah blah.

So from the business community -- I think you in the Congress need to figure out a way to make -- help the business community not be seen as the enemy by the NGOs and AID.

LOWEY: Well, I'd love to meet with you to just talk about this issue, because certainly I don't feel that way. And even before I became chair, I worked closely with Jim Kolbe, the former chair. We had a great relationship. And we both understood that, in order to have sustainable development, I could go down a list of programs -- I remember a furniture program in Latin America where we were training the community to build furniture, and then they were on their own. So if there are problems, I'd love to know about it, because I think it's essential to get the private sector involved.

And, in fact, one of the questions I have, just having come back -- I spent a weekend in the Middle East, and there's extraordinary activity in Ramallah.

So my question was -- and I couldn't get an answer -- you have Salam Fayyad, that everyone has confidence in, including us; Abu Mazen, knowing this is quite a high-powered conference, run by Saban institute, so he ran off to Brazil waiting to be begged to come back. And my questions were, in Ramallah, where is the Palestinian diaspora? Ramallah is growing. There's a lot of money to be made in Ramallah. There are a lot of money being invested in telecommunications in Ramallah. But if you go to the rest of the country it's a little iffy.

One of the big success stories in the West Bank, of course, is our support for General Dayton and the security forces. So -- I'm trying to think of the third one.

So number one, I and most of my colleagues are strong supporters of the business community. In fact, in dealing with HIV/AIDS, the business community has come around and understands that they have to invest in clinics, et cetera, because they're going to lose their employees after they train them.

Is there another one that I didn't answer? I forgot. (Laughs.)

QUESTIONER: On Ramallah, specifically. We are in -- were in Ramallah and ran into the buzz saw of AID, despite being there under the invitation of TDA and (OPEC/OPIC ?). And so that's dead. And now we're talking in Iraq and Pakistan and others. And the problem, in my view, is that the NGOs so want to defend their turf, they don't want to see money go towards the business community.

LOWEY: Oh, I'd be happy to talk to you about that, but -- oh, I remember what the other question was, at the very beginning. And one of the first conversations I had with Hillary when she assumed the role of secretary of State is coordination, because you are absolutely right. I remember a trip to Ghana, and frankly, wherever I go I ask the ambassador to bring everyone together, whether it's the World Bank, OPEC, TDA, Ex-Im, MCT. MCT was operating on their own wavelength and no one was working together. And you know what? Everyone was operating in their stovepipes of excellence, because they're doing good work but they didn't coordinate.

PEPFAR is operating in a marvelous hospital doing great HIV/AIDS work with, I think it was -- (Guy ?) will tell me -- probably a tenth of the money or less than PEPFAR was getting, didn't get any of the PEPFAR money. So coordination is key, and I'd be happy to work with you on the issue of using the private sector.

You know, it's important, if you are encouraging the private sector, you also want the private sector to be investing in the country, and it has to be in their interest as well. So I'm not going to defend one or the other. Let's talk about -- (word inaudible).

MCPHERSON: Okay. Other questions. Right over here.

QUESTIONER: C.D. Glin with CDC Development Solutions. Congresswoman Lowey, I know you're a fan, so I'm surprised at no mention of the Peace Corps in your remarks.

LOWEY: I love the Peace Corps.

QUESTIONER: And I wanted to know, what role do you see an expanded Peace Corps -- say, from 7 to 8,000 volunteers to 12 to 14,000 around the world -- can play in our diplomacy and development, civilian-led activities?

Because as we all know, Peace Corps volunteers serve as citizen diplomats but also development professionals, in more than 70 countries around the world.

LOWEY: Well, let me just say that I didn't mention the Peace Corps because I purposely omitted it. I could have given an hour-and-a-half speech. I could have talked about every part of the government that we fund.

I love the Peace Corps. As you know, I requested 450 million for the Peace Corps. A little difference with the Senate -- I'm not sure where we'll end up. But wherever I go, I am impressed with the Peace Corps. And the new head of the Peace Corps is superb.

And I'm sure he will create a confidence if, in fact there are some people -- I don't know who doesn't have confidence. But in terms of organization, as you know, there are challenges. Let's say that.

And I look forward frankly to working with the Peace Corps. I'm the number-one fan. We took it from 370 million to 450.

What did I do?

(Cross talk.)

Yeah, and then the administration requested -- it was 340. The administration requested 370. I took it to 450. But on the other half, they didn't quite get there. So we're still talking about it.

Thank you for bringing up the Peace Corps.

QUESTIONER: Thank you, Congresswoman. Noam Unger from Brookings.

You mentioned CERP funding in Afghanistan. And I'd like to hear you talk more about this issue of authorities, because it sounds like you're very much of the narrative that the civilian capacity should be built and authorities should be restored to the civilian side, as capacity is built.

There's another narrative that says that, you know, folks don't want to give up their authorities no matter what, because it's a new world, a new way of operating. And I hear that out of the Office of the Secretary of Defense. But that it doesn't sound like that's where you are.

But my question is, what metric do you hope to use? Or what are your thoughts on how you actually benchmark the increased capacity, on the civilian side, at which point certain authorities and responsibilities can be transferred to the civilian side, in some ways reversing some of the trends that we've seen, in recent years?

How do you think about those issues? What measurements would you use to say to yourself, yes, the capacity is there, and the authorities should now follow, because as you know, the Department of Defense has actually pushed for legislation recently to make certain authorities permanent and global. And that was rebuffed.

LOWEY: We won it.

QUESTIONER: But those efforts are still in the works, I think. I don't think that those efforts have died.

LOWEY: Yeah, I'm not sure we'd win it next year. But we won it this year.

Well, I -- you're talking about -- (inaudible) -- the money.

QUESTIONER: (Off mike.)

LOWEY: Twelve-oh-six, yeah. Yeah, the whole deal.

Look, the basic idea and the reason I pushed -- I don't know that we're going to win every round.

Again, we have a leader, the president of the United States, the secretary of State.

As I felt with FMF funding, and many of us feel with -- I'll deal with that at first, which is, the FMF funding, the authority should go through the secretary of State's office, because the secretary of State is the person, working with the president, who is supposed to make policy. So I felt, for this money, for FMF funding to go directly to DOD, even though they implement it, whether it goes through the secretary of State or directly to DOD -- I and many of us felt that it should go through the secretary of State, because, as you well know, the military is extraordinary. I have enormous respect for the military. But I think the secretary of State should have the authority, and that's the way it was last time.

Now, do I think at the -- at -- whether it's in the Congress or the Department of State, we should be making these decisions? This should be made on the ground. I mean, whether it's McChrystal's plan or Eikenberry's plan, there are very -- many very talented people there.

And the reason I was so pleased that Dr. Shah was appointed, that I think he has the respect of so many people in the government. But it's -- whether it's McChrystal or Eikenberry -- I can't remember all the others -- I think another general was just sent over there. In any event, there are a lot of people over there who are making this decision. And they're just going to have to make those judgments.

As I said, if McChrystal's plan is the one that's going to be implemented, they're going to operate in 80 out of 354 districts -- villages in Afghanistan. Now, maybe in 10 of those villages, McChrystal or whoever is making the decision may feel it's secure enough that they can move out and USAID can be there. Maybe in the rest they can't. I don't think there's a set rule.

The important thing is that there's a focus on working together to make those decisions, and that USAID and the other civilian agencies have the capacity to be a partner. But I don't think you or I can make that decision as to who's doing what. That has to be made on the ground. Does that make sense to you?

QUESTIONER: (Off mike.)

LOWEY: No.

QUESTIONER: (Off mike) -- funding authorities like 1206, 1207, CERP should all go through State and that's your --

LOWEY: No, no, no, no, no. I'm not even talking about 1206 and 1207. Frankly, it's often a way to -- (chuckles) -- sort of get additional money. And that's another discussion; we can talk about 1206 and 1207.

But if I recall, from 2001 to 2009, the military had 18-plus billion dollars appropriated to it for the CERP funds. And was that total funding? Total funding, yeah. And USAID had 14-point-something billion (dollars). So I'm not suggesting that through our laws we make a decision. I mean, these are life-or-death decisions. We have young men and women who are losing their life there, and I'm not going to suggest that a USAID worker has to go in an area where he or she is losing their life. These are decisions that have to be made on the ground.

QUESTIONER: I didn't mean that at the field level. I meant more at the account authority level in legislation, which resides with Congress. How do you view making those decisions? By what -- how do you benchmark when certain -- because certain authorities were provided to DOD, and those have expanded over time.

LOWEY: Twelve-oh-six, twelve-oh-seven. Right.

QUESTIONER: Exactly. And it sounds to me like you're saying that over time civilian capacity should be built, and those authorities should reside on the civilian side.

LOWEY: Yes.

QUESTIONER: And the question is, how do you decide --

LOWEY: How -- as well as the money goes -- (chuckles) --

QUESTIONER: -- how do you decide when to make that switch, how to make that transfer? What's the process?

LOWEY: Well, right now USAID -- I mean, our job is to build up the capacity at USAID and State. You know, I mentioned before the numbers -- we're increasing State, we're increasing USAID. And I think I talked about Ambassador Neumann. A couple years ago, he said, USAID couldn't do it. And it's not just I'm focusing on Afghanistan; this has to do -- well, we don't have troops on the ground in Pakistan, so that's another story.

But in other trouble spots around the world, it really depends upon budget allocation, who's doing what, who has the capacity. Ideally, you shouldn't have to transfer authority, but if you don't have enough money -- we talk about 1206, 1207 all the time, because it should go through the secretary of State, if it's FMF money. But what'll happen in a trouble spot -- and I remember it -- the military will say, "Well, I have this money. I need this money." (Chuckles.) You know, right?

LOWEY: That's right. So if they had the money, if I were -- and I'm not -- on the ground in Iraq, I wouldn't say, "Oh, no, you know, you can't use 1206.

It has to go" -- (chuckles) -- it's half of the money. And the PRTs, frankly, in Iraq, if I recall, didn't have adequate civilian capacity. So that was part of the problem there.

MCPHERSON: I was in Iraq last December, meeting with DOD people. They were working on the long-term agricultural production in Iraq.

LOWEY: Yes.

MCPHERSON: It struck me as unusual.

Over here.

QUESTIONER: Thank you. Fred Tipson, with the U.N. Development Program. May I ask you about your views on the multilateral channels for development assistance? And as you recall, when Helen Clark, my boss, was in to see you, we discussed whether there might be areas that, in some places in particular, multilateral agencies, specifically U.N. agencies, might be better placed to do certain kinds of development work.

The challenge, as you know, in Afghanistan is that we can't really operate under a PRT framework. We just lost five people recently in Afghanistan -- basically, for a lack of security. And yet, we can't seem to get support within the U.N. to really invest more -- just in kind of minimal investments in security. But increasingly, we're being asked by the U.S. government to do more, even in the tough places. Do you have a view as to how we should -- (laughs) -- and not so much a security issue, but more on the question of where the multilaterals need to be in order to do certain kinds of development work?

LOWEY: Look, I think President Obama has been very aggressive, whether it's in South Korea, that he just returned from -- very aggressive in making it very clear that we should be in this together. Unfortunately, when you're in Afghanistan what you see is the Brits and the U.S. troops, Canadians somewhat, doing most of the work. So ideally, you'd want a strong NATO force, equivalent to the U.S. force. And these decisions should be made in a multilateral way.

I don't think the United States wants to be operating any place where there's a conflict, without international support. But how you deal with the security is something I turn back to you, because I don't know the answer to it. How would you suggest to do it? I don't know the answer to it.

I'm not even sure if legally the United States force can provide security for the U.N.

I think there are regulations whereby they cannot operate. But I'm not sure.

QUESTIONER: Well, actually, in Afghanistan the procedure is that the Afghan forces have to call in the ISAF troops in any given situation. And unfortunately, in this past circumstance it was an hour before anybody arrived, and our guys ran out of ammunition. They were killed because they ran out of ammunition.

But really my question is a broader one, in the sense of if the U.S. does want multilaterals to be involved in some of the tougher places, there needs to be an organized support among member states to invest a little more in security. We're only talking about $50 million that the secretary-general asked for on a global basis, not for armored vehicles but for just minimal kind of security improvements.

LOWEY: Certainly it's an issue that should be brought up with the administration. But you can be chair of that committee. UNDP would be just the appropriate group to advocate.

Obviously, it's necessary. Losing five people was a terrible tragedy. And there are such good people who are ready and willing to operate, but they shouldn't be asked to operate without appropriate security.

I think the whole multilateral effort is key. And when I talked before about my experience in Ghana, whether it's the World Bank or the private sector or the foundations, I remember when we first started investing in HIV programs. Gates was there, CGI was there, Nike was there, our government was there, but no one was talking to each other. There's much better coordination now. And I think this is a key priority, not just of mine. I mentioned before the secretary of State.

I think, what, one more question? I'll let you make that choice. Oh, my goodness.

MCPHERSON: This young lady right in the middle. Sorry, everyone. It's not fair, is it? Go ahead, please.

QUESTIONER: Thank you. Africa has received a lot of money. And that money doesn't necessarily make it to where it's supposed to go. The United States has given money to a nation that is as wealthy as Nigeria. If Nigerian dollars don't make it to Nigerian people, it's a little hard to think that American dollars will. You have Egypt that receives a whole lot of money. And I was there a few months ago; doesn't seem like that's getting there. Ethiopia receives, I think, the most out of all of them, and a lot of it is for agriculture; but they're selling hundreds and thousands of hectares of their land for farms to India, to Saudi Arabia, to China, for their food security.

So America is doing this with taxpayer dollars.

And America is doing this to have some sustainable development and foster good will. But it's not happening.

So when you give out this money, is there something that you can do? I mean, should something be done at this point, where it's obvious that the money is not getting there?

I mean, I'm not saying to all nations. But a lot of these countries, the money is not getting to the people that -- in the programs that it's meant to be. So you know, what can you do?

LOWEY: I love that question and I'll tell you why.

I was with Hillary Clinton on the first half of her trip to Africa. And she was so strong. Frankly she's like a rock star there. I mean, she had a group of -- usually when I lead a congressional delegation, they greet me. Not when you're with Hillary Clinton. I kind of tagged along behind her. She was amazing. And if you followed that trip, she talked repeatedly about corruption.

Now, in Kenya for example, where we're spending upwards of 500 million -- billion -- (laughs) -- million, not billion -- $500 million for HIV/AIDS, they failed all the corruption indices. But at least the money for HIV/AIDS is going to save people's lives.

Hillary talked about corruption. I met with about a dozen women who we fund, for microenterprise programs, an incredible group of strong women. And they barely survive.

One was a butcher. Another was selling little containers of gasoline, for people to operate their stoves. Incredible group of women -- why do they barely survive? Because the local councilman stops off once a week. Other people stop off once a week.

The corruption is rampant. So how we deal with this, the MCC was supposed to be dealing with it. Various indices were put in place. And I think as we think about expanding our programs, we even have to be tougher, because it is so sad that those at the top are doing great.

You mentioned I think Nigeria. So many countries in Africa have resources that could help people. But it's not going to the people. So how you promote democracy, how you help people start their own businesses, has to be combined somehow with some plan. And I don't have the answer. every country is different.

Look, look at Zimbabwe. And Mbeki for years didn't do a thing. And in -- I remember in South Africa years ago, Cameron Hume, who was our ambassador, was extraordinary when the woman minister of health wouldn't even acknowledge that HIV/AIDS existed.

There are a lot of problems, not just in Africa, throughout the world. And I'm just hoping, again, that all the talented people in this room, and with President Obama, with Secretary of State Clinton and the team, we can begin to find some effective solutions to these age-old problems.

MCPHERSON: There are at least a dozen more questions that people wanted to ask. I -- we've run out of time. We appreciate your very strong and effective leadership.

LOWEY: Thank you.

MCPHERSON: And many of us hope -- I certainly do -- that you continue to pursue this issue --

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Christine Fair, associate professor at Georgetown University’s Edmund A. Walsh School of Foreign Service and expert on South Asian political and military affairs, joins James M. Lindsay to discuss Pakistan’s July 25 election and incoming Prime Minister Imran Khan.